Do you keep a budget?

I find that a budget, or what I consider a "budget", to be to constraining.

I review our monthly expenses (mostly CC) and, if they spike up, I check it out to find out why. This seldom happens as I keep a pretty good handle on what is spent throughout the month and DW is not a spendthrift who creates surprises.

I guess you could say that this is a kind-of LBYM budget process.
 
In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.:cool:
 
I did not have a budget when I was single... spent lightly on what I wanted and saved the rest...

Now married... and the wife is a 'live now' kind of gal since she lost her first husband to cancer in his early 40s... so it is hard for me to get her to 'rein in' the spending without a budget... however, she ignores the whole thing, so I am not sure what I will do in the future...

Right now I just keep track of spending vs budget and when she says 'we need this' I can pull out the budget and say we have already spent the next three years budget on that item... she gets mad and spends her own money at times...
 
Bikerdude said:
In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.:cool:
Click to expand...

I have an informal one in my head. I was an accountant for most of my working life, but never kept a written personal budget.:tongue:
 
I managed the budget process at work for many years - and learned a lot in the process. I was never able to replicate that success at home, however. Now I just track our expenses.

The more categories I try to track, the less motivated I am to update on a regular basis. Now I update once a quarter, just to make sure we are on track and have enough in the bank to get us through the year.
 
Bikerdude said:
In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.:cool:
Click to expand...

Can't argue there BD. From time to time DW will advise me about a purchase that she is thinking about making and I generally say "Yea it sounds nice honey, but it's just not in this year's budget."

She never asks to see this non-existent budget that I have referred to and will generally make the purchase anyway.:rolleyes:
 
I don't keep a budget. Perhaps I should. I do look at expense on annual basis, but I don't say gee I thought I was going to spend $X and actually spent $X+20%.

For those of you who do keep a budget, what are the benefits?
 
No formal budget here. I know what my expenses are and keep enough in ready cash to pay the bills and also for the occasional big ticket item(like a trip or a major car repair). It has worked so far. I put most day to day items on my cc so I get a list every month in the form of a statement.
 
clifp said:
For those of you who do keep a budget, what are the benefits?
Click to expand...
For me, I think the biggest thing is peace of mind....

I started keeping expense spreadsheets about four years ago. It really opened our eyes to where our money was going. DH just retired six months ago, so it helps to keep the budget plan because neither one of us is the "bad guy". We just look at our budget and see if we can afford something. If the money is not in the budget, we decide whether or not an item/expense is really that important. Most times it is not.

My yearly budget amount does not include my "fluff" fund. :)
 
I track all my income & outgo on Quicken. Income is ~$2000/mo. Basic expenses ~$1000/mo. Near the end of the month anything leftover goes to MMA or to wild spending or to giving it away.
 
We budget based on our average monthly income minus regular monthly bills (most paid by auto bill pay from checking), minus a monthly contribution to several variable expense categories such as "Travel", "Gifts" and a few others. The remaining amount is deducted from our paychecks and deposited in retirement accounts and savings.

We keep track of the virtual balances in our variable expense categories. If, for example, we have a fairly expensive trip planned for a winter getaway to Arizona in February, we anticipate the cost to make sure the account balance for "Travel" will be adequate at that time. That could mean a short budget vacation in November or even no vacation at all. It works well for us. We know that our savings and investment goals are being met automatically and the rest is for fun and for sharing.:flowers:
 
Bikerdude said:
In my mind someone without a budget could spend $100,000 in a year when they could only afford $20,000. So in this respect most here have a budget they live by even if they do not admit it.:cool:
Click to expand...

I found myself with the majority here who say they do not have a strict budget because they typically underspend. The whole idea is to be LBYM with a significant margin so that one never has to count the last dollar.

Well, the above has always been true in my life until recently, when my part-time work is drying up, the market tanks, and my kids' college tuition hurt like the Dickens. Suddenly, for the first time in my life, I have to watch the 4% SWR mark. We will be in good shape when the kids are done with school, but until then we cannot indulge in travels like we did in recent years. So, yes we do have a budget, but it is loosely defined.
 
I have both tracking of expenditures and a budget. Tracking is now in Moneydance but used to be in Quicken. I never liked the budgeting portion of Quicken and found it less than useful except for finding out what I was spending on a particular category. The budget is in an excel spreadsheet. I started the detailed budget about 5 years ago. Once I got it in good shape, I started projecting out about 5 years. By doing this, I get a good grip on my projected spending with my retirement income folded in. This exercise gives me a lot of confidence that my retirement will work for me.

Over the last 3 years or so, I've tweaked the budget spreadsheet with each change so it is up to date and still shows me that my plans will work. For me, the rewards are well worth the trouble, which isn't much anymore.
 
Never tracked expenses or set up a budget. Saving on a monthly basis is on automatic and any bonuses/windfalls are tossed into the taxable account, with perhaps 5% skimmed off the top. Other than that, outgo has to be equal or below the remaining income or there had beter be a good reason (or at least a conscious decision).

When I get within a few years of FIRE I will invest the time to track expenses closely for a few years, but don't have the time or inclination right now.

Also never balanced my checkbook in my entire life...
 
I'm a like Tesaje, I track expenses uses Mint.com but set a budget at the start of each year. I start by taking off my savinsg first. Then I have a group of non-discretionary expenses (some fixed, like mortgage, or an allocation for irregular expenses, like insurance or prop taxes). Finally I start with the discretionary expenses. I include any major purchases (like computers or TVs) that I plan to make that year. I also have a "wish list" of stuff, that, if I get a windfall or end of underspending in an area, that I can go ahead and buy. Also, if I have to make a large unplanned expense, than usually one of the major purchases will have to get pushed off. For example, last year I had planned to buy a new laptop, but my old 27" TV died on me, so I bought a new flat screen TV instead and deferred the laptop purchase to this year.

This is why I do the annual budget...to make sure I'm thinking about the major purchases as well as the day-to-day expenses, which at this point I have dialed in enough that I probably wouldn't need to budget just to control those...
 
brewer12345 said:
Never tracked expenses or set up a budget. Saving on a monthly basis is on automatic and any bonuses/windfalls are tossed into the taxable account, with perhaps 5% skimmed off the top. Other than that, outgo has to be equal or below the remaining income or there had beter be a good reason (or at least a conscious decision).

When I get within a few years of FIRE I will invest the time to track expenses closely for a few years, but don't have the time or inclination right now.

Also never balanced my checkbook in my entire life...
Click to expand...

This is exactly the path I followed. Started tracking/budgeting once I retired and have continued since.
 
I started tracking expenses ~3 years prior to retiring. Used that as a base for a budget in retirement and continue to budget and track. Excel spreadsheet with 30+ categories.
 
I've never kept a budget but I do track expenses after the fact (44 categories here)
 
We have a weekly budget that is reevaluated quarterly. 25-35 categories most on a spreadsheet on auto pilot the remainder is cash in envelopes. I can get DW to confess her status between monthly and quarterly. Bonuses typically have 66-33% to savings and we debate spending for the rest. Fairly common that we run a deficit and the bonus discretionary is used to clean that up before we consume.
Fortunately our income leaves a lot of room for errors. Despite the borderline execution I think we would be saving $10-20,000 a year less if we didn't use the budget.
 
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